Our new Disruption by Blockchain series aims to highlight companies that are leveraging the incredible potential of blockchain technology to disrupt and revolutionize their industry. Through one on one interviews, we'll speak directly with industry leaders to cut beyond the hype and get directly to the heart of practical use cases and examples of how it will change the world, one industry at a time.
The following is an interview we recently had with Dmitrijs Orlovs, CEO of RxEAL.
1. What’s the history of RxEAL?
DO: A few colleagues from the current RxEAL team and I were working on a real estate related FinTech project in 2016 and became enthusiastic about opportunities that blockchain can provide to improve the industry. Specifically, the idea to use Ethereum blockchain for the security deposits appeared once we saw the possibilities that smart contracts can provide, this was something that could not be achieved before as the transaction between parties always involved trusting each other, with the smart contracts it became possible to store the security deposits inside mutual contracts without having a third party (escrow or a tenancy protection scheme) who holds the funds. Eventually, this transformed into the creation of RxEAL.
It should be mentioned that the idea about RxEAL was backed by one big property development company which was losing significant funds due to disputes regarding rental security deposits.
2. Who are the founders and key team members?
DO: RxEAL team, advisor and partner network consists of entrepreneurs, web engineers, blockchain developers, lawyers, marketing specialists and industry professionals with years of experience working together, growing companies to global scale and delivering pioneering products and services. Project is backed by well-known strategic partners such as McCann Riga (advertising) and Scandiweb (blockchain development). Also our advisory board consists of very experienced enterpreneurs. One of them has established exchange, another property development company, third is runing VC firm and so on.
Dmitrijs has gained comprehensive experience in the field of tax and finance while working in EY with companies such as L’Oréal, IBM, General Electric, Accenture and others. In addition, Dmitrijs has managed various projects in the fields of IT, engineering and marketing. Dmitrijs has also gained valuable sales and marketing experience while working as the Head of Sales in a hardware startup and while managing marketing related projects in the biggest retail chain in the Baltics.
Aleksandrs co-founded an agency specializing in WordPress-based solution development with more than 20,000 clients from all around the world choosing its products. Aleksandrs has studied international economics and commercial diplomacy and has always been excited by new technologies, and while working on a real estate related FinTech project in 2016 he became enthusiastic about opportunities that blockchain can provide to improve the industry and eventually this transformed into the creation of RxEAL.
Janis is experienced lawyer and financier for almost 10 years. His expertise lays in financial markets, investment management, securities law, securities regulation and corporate law. He has been working as a financial market and global economy analyst, structured private equity and alternative investment funds, complex commercial real estate transactions and has provided financial, legal and tax consultations to various corporations and high net worth individuals.
Ian Scarffe is a serial entrepreneur, investor and consultant with business experience from around the world.
A leading expert in Bitcoin, Blockchain and Crypto industries, Ian is at the very heart of revolutionizing the financing industry across the globe and currently consults and advises for a range of multi-million dollar companies.
Ian’s overall mission is to foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities across the world.
Ian now focuses on the Blockchain industry and offers advice, consulting services, connections to Blockchain experts and investor relations strategies.
Ian Scarffe has outstanding entrepreneurial skills and commercial acumen with innovation and motivation. With the capacity to work at strategic levels, Ian possess exceptional interpersonal, communication and negotiation skills.
A passion for customer service, wealth of knowledge and vast amounts of hands on experience in almost every role, means Ian has valuable insight into millions of customers, proving him to be a valuable asset to companies across the globe.
Nathan is a technical expert in Blockchain-based accounting and financial applications. He is a Serial entrepreneur with over 35 start-ups in his portfolio. He is deeply entrenched in the blockchain space and has made it both his career and life passion. He is an accomplished Blockchain and Fintech international speaker and is a Top 5 ranked member of the ‘People of Blockchain’. He is also diversely skilled in ICO strategy, development, venture capital investment, consulting and advising. He has earned his MBA and his BA with honors. He leads various executive education programs and is actively involved in consulting with corporations, banks, investment firms, stock exchanges, and law firms.
Jason is a serial entrepreneur and inventor in mobile business, blockchain ecosystem, digital marketing, AI and ERP related business. He is the co-founder of Treascovery, Chidopi and TimeBox, and the advisory board for more than 20 ICOs include BitRewards, BlockLancer, Datarius, ICONIC, AIDA, EZPOS, Suchapp, USAT, EVENFOUND and SafeCrypt. He has more than 20 years proven track record on managing RD, IT, sales, consulting service with 9 technology related patents which using at more than 2000 Apps. He was also formal PeopleSoft and JDE solution head in Greater China. He is also a blockchain expert of ICOBench and International Blockchain Consulting Announcement Group.
Mushegh Tovmasyan is a FinTech entrepreneur and a veteran of the online trading industry. He has over 15 years' experience in senior management roles at regulated companies in USA, UK, UAE, Germany, Switzerland, San Marino, Cyprus, Armenia, Japan and New Zealand.
He runs a private seed and venture capital firm and acts as advisor to a number of innovative FinTech companies who apply blockchain initiatives to disrupt legacy industries. A serial entrepreneur at heart, Mushegh is a shrewd negotiator and has a good eye spotting individual talent and untapped opportunities in the market.
A strong technology background mixed with hands-on management experience across various global jurisdictions has influenced Mushegh to excel in leadership roles pushing all his ventures to the forefront of the modern Fintech era.
Aly Madhavji is the Founder and Former CEO of Global DCX, an innovative technology company launching secure digital currency exchanges across the globe starting in India. He is also an avid investor in early stage companies, digital currencies, and Initial Coin Offerings (ICOs). He has served on various token advisory boards including Polymath and Jet8 and traditional advisory roles including the University of Toronto’s Governing Council. He is an internationally acclaimed author, publishing three books, including the award-winning book titled, “Your Guide to Succeed in University”, as part of the Succeed Series. He has lived and worked across 4 continents (North/South America, Europe, and Asia) with PwC, PayPal, Microsoft, Bloomberg, and INSEAD. He also holds the Chartered Professional Accountant, Chartered Accountant, Certified Management Accountant, and Chartered Investment Manager designations.
3. What problem is RxREAL solving?
DO: RxEAL is a solution for eliminating a growing number of fraud cases in rental transactions associated with unfair withholding of funds from the security deposit at the end of the rental agreement by providing an interface to engage in these activities using smart contracts requiring no technical knowledge. Not only does RxEAL solve the aforementioned problem, it also provides much faster deposit return rates and cost effectiveness compared to current off-chain solutions.
RxEAL may be used by real estate agencies, property development companies, car rental companies as well as by private individuals which would like to benefit from blockchain technology.
4. What is your solution to this problem?
DO: RxEAL is a long-awaited solution for rental security deposit protection. It is a platform for trustless deposit storage and dispute resolution, focusing on real estate and automotive industries. RxEAL blockchain solutions are easy to integrate into the existing company workflow or to use by an individual. In conjunction with advantages over traditional security deposit systems, this makes RxEAL the accelerator for blockchain technology mass application.
Within the RxEAL platform, users are able to generate smart contracts based on terms both parties have agreed on. The contract will ensure that the deposit amount is stored securely on the Ethereum blockchain throughout the course of the agreement with no possibility of unilaterally changing the contract terms or accessing the funds. In the event of a dispute regarding the final division of the deposit, our platform will provide a decentralized and independent arbitrage conducted by qualified members who earn RXL tokens for resolving the dispute
5. Why is your industry ripe for disruption?
DO: Real estate and car rental are among the largest business industries in the world generating hundreds of billions of US Dollars in turnover.
People are in constant need of finding the right place to live, work and travel, thus, creating a regular demand for real estate properties and car rental services that are the most popular types of rental transactions in the world.
The global real estate industry had total revenues of $3,505.2 billion in 2016 representing a compound annual growth rate (CAGR) of 4% between 2012 and 2016. According to various sources, rental transactions compiled almost one third of respective revenues.
At the same time, the global car rental market was valued at approximately $58 billion in 2016 and is expected to reach almost $125 billion in 2022.
Unfortunately, a significant amount of the agreements on these rental transactions end in disputes. Most of the dispute cases arise on the basis that deposits have not been returned or the amount returned was lower than expected. Currently lessor fully controls the deposit and lessee has to trust and assume that he has the right intentions to return the deposit fairly.
Most of us who rented an apartment or a car know that return of security deposits can be challenging and the dispute arises it is almost impossible for an individual to fight the army of lawyers of the large rental company. If you take a look at the car rental company review on Trustpilot or other feedback and rating websites, it becomes clear that the problem is very significant. Some countries have even implemented government tenancy protection schemes for llong-termproperty rentals, however even then dispute resolution is not an easy and transparent process.
We want to replace the security deposit disputes with technology and make renting experience better for everyone involved.
6. What’s the future of your industry?
DO: Today, more people than ever before are involved in rental transactions, caused by factors like the growth of the sharing economy, favorable conditions for travelers and others. We do not see this trend changing anytime soon.
Our top 3 predictions for the industry are:
Prediction #1: Sharing economy revenues will double in next 5 years.
Prediction #2: More people will be moving and traveling abroad, increasing the need for universally accessible rental solutions.
Prediction #3: Renters will be looking for more technology integration into rental products and rental experience as well, this is where blockchain startups like RxEAL will be used.